Value of Statistical Life (VSL)
is a concept which was born out of political interest but later started
serving as a policy instrument. Viscusi (2003) in his grand compilation of
over 100 studies has broadly discussed the issues, methods and controversies
related to VSL. This paper is an extension to his work in the sense that it
intends to compile more literature on VSL from 2003 till 2015. After 2003,
many new developments took place in VSL literature which has been reviewed
and presented in this paper. This critical review of literature incorporates
various econometric issues with estimation of VSL besides addressing various
other issues like role of unionization and effects of worker’s compensation
benefits on risk premiums, heterogeneity issues of VSL and existence of
segmented labour markets. VSL values estimated from different studies are
not uniform and the source of this variability needs to be understood in
order to guide present and future policy making. This article presents a
meta-analysis based on 34 observations from 30 VSL studies which have used
hedonic wage method to estimate VSL. Our meta-analysis based on mixed
effects regression method suggests that the emerging areas such as the
effect of worker’s age, compensation benefits and long–term health-related
job risk need to be explored further when VSL is estimated.